A Fraudster's Nightmare Called 'Bubba'

Tennessee's Arthur Hayes has had a major impact on the world of government auditing. Don't get him started on "gray areas."

He served in Army Intelligence as a Polish linguist, rides a Harley-Davidson and calls himself "Bubba." Arthur A. Hayes Jr., J.D., M.B.A., C.G.F.M., C.P.A., C.F.E., a nationally recognized expert on fraud who is about to retire as the state auditor of Tennessee, has had a huge and positive impact on the world of government auditing and accounting, both by having held positions on virtually every policy-making body or committee in the field and by having conducted hundreds of training sessions, workshops and seminars.

There is probably not a government auditor or accountant in America who hasn't seen Bubba in action, and his "gigs," as he likes to call them, could not be more unlike the endless hours of required continuing professional education that auditing professionals have to sit through. He is an outrageously funny showman who does his stuff not in a suit and tie but in Harley getup--kind of like a Robin Williams who knows the technical arcana of accounting cold and can put it into a real-world context to which virtually anyone can relate.

Art is 65, and the years, accidents and health issues have taken a toll on him. He walks with a cane and confesses that he is pretty much in constant pain. Except when he's performing. It's the strangest thing, and he acknowledges that he doesn't understand it, but when he's doing a gig, he says he's pain-free. The cane is discarded, and he bounces around among the audience laughing along with them like a man who's thoroughly enjoying himself.

I recently saw Art in action again at the Southeastern Intergovernmental Audit Forum's annual conference in Nashville. The session's title was an unusual one, at least for an auditing workshop: "Cognitive Dissonance and Fraud." He rambled around the room genially describing those sorts of moments that many of us have when we realize with 20-20 hindsight that we've seen that something was amiss but didn't act on our instincts. We had what psychologists call "cognitive dissonance"--the uncomfortable feeling of holding contradictory thoughts in our heads--and we resolved it by rationalizing that the warning signs we'd seen were explainable in benign ways.

For example, something seems out of kilter with accounts receivable. You ask the finance director about it, and he offers a plausible explanation. What he says might be true--it's sort of a gray area, and so you give him the benefit of the doubt. "Benefit of the doubt!" Art explodes at the top of his lungs. "Gray area! That's where you startyour audit work, not where you end it! Examining gray areas is what we do!" Of course, that is exactly right, and a young auditor hearing Art is given the courage to dig a little deeper the next time a gray area comes up.

The importance of examining gray areas is just one of many lessons Art has drilled into his colleagues in the field over the decades. He and I pretty much started our auditing careers together, working side-by-side as young auditors at the Tennessee Division of State Audit in the 1970s. In 1988, Art succeeded Tennessee's legendary auditor, Frank Greathouse, as director of state audit in the Office of the Comptroller of the Treasury. Now, after all these years of making the world a less hospitable place for fraudsters, in January he's stepping down. Without Bubba, the world of government auditing will never be the same.